Which method of preparing the operating activities section of the statement of cash flows adjusts net income to remove the effects of deferrals and accruals? a. the indirect method b. the direct method c. both direct and indirect methods d. neither the direct method nor the indirect method

Stosch company's balance sheet reported assets of $112,000, liabilities of $29,000 and common stock of $26,000 as of december 31, year 1. if retained earnings on the balance sheet as of december 31, year 2, amount to $74,000 and stosch paid a $28,000 dividend during year 2, then the amount of net income for year 2 was which of the following? a)$23,000 b) $35,000 c) $12,000 d)$42,000